Tuesday, July 21, 2009

The Business Plan

The website Articlebase provided this interesting guidance on preparing a business plan. While the writer refers to a bookkeeping business, her ideas are pretty much transferrable to other business models, and the simplicity of her approach will not intimidate the new business person.

Admittedly, a bookkeeping business does not usually have to present the plan to potential investors or lenders, and if your business involves manufacturing costs, or a distribution network, or the roll out of a new product, you will have to provide details for those aspects of the plan, and flesh out the plan with projections, analysis, and a roster of key persons. However, even for those requiring a more rigorously developed plan, I think the "one page" approach is a good place to start, and then to be developed.

Here's a link for advise on developing the kind of business plan you may eventually need to take to the bank or prospective investors, but please constuct a one page plan first. I especially like the authors advice regarding the "vision statement". At this point you should not be toning down your optimism for fear of skeptical reviewers.

PS One other thing. I like to recall the words of one self starter. I don't try to figure out what I can do, or what I like to do; I think of what I would pay someone to do.

The One-page Business Plan for Your Bookkeeping Service

Author: Linda Hunt

Sometimes the thought of sitting down to draft a business plan sends me running for the hills, even though I preach the importance of planning to all of my clients! Small business advice: Without planning, your bookkeeping business goes nowhere fast. When you fail to plan, you plan to fail

What I have come to learn as a business coach is that business plans don’t have to be long to be good. In fact, a single page can contain all the essential elements you need to show where you’re taking your bookkeeping business and how you’re going to get there. The most important reason to have a business plan is to clarify your thinking about where you are taking your business. When it’s in writing, others will know and understand your vision and your plan

Here are a few characteristics of an effective one-page business plan for your bookkeeping business.

• Simplicity. A one-page plan takes a complex subject and makes it simple

• Focus. It focuses on what’s important. There is no room for fluff or filler.

• Versatility. It is a communication tool for employees, prospective employees, partners, shareholders, investors and bankers.

• Consistency. It sends the same message to every person who receives it, unlike a verbal presentation, which may change every time you speak.

• Flexibility. It is easy to change and update.

The Five Elements of the One-Page Business Plan

1. The Vision Statement – What are you building
This is the place where you describe your vision —your way. Most business coaches will tell you that vision statements should be expansive and idealistic. They should stimulate thinking and communicate passion, while painting a detailed picture of the bookkeeping business you want. The key to capturing your vision is to refrain from restricting the flow of thoughts.

2. The Mission Statement – Why does this business exist
The mission statement describes the purpose for which your product, service or business exists. Great mission statements are short and memorable. They communicate in just a few words the company’s focus and what is being provided to customers. They answer the question, “Why will customers buy this product or service?” The mission statement should also reflect the owner’s passion and commitment. When the business satisfies an owner’s passion for creativity, independence or the need to serve, there is substance and staying power in the mission.

3. The Objectives – What results will you measure
Objectives clarify what you are trying to accomplish in specific, measurable goals. Some of the best small business advice that I can give you is this: for an objective to be effective, it needs to be a well-defined target with quantifiable, measurable elements. There are many types of objectives, and your plan should include a variety of them. For many businesses the two most important categories will be the financial and marketing objectives. It is important, however, to tailor your objectives to cover the full scope of your bookkeeping business, focusing on the goals that are most critical to your success

4. The Strategies – How will you grow your business
Strategies set the direction, philosophy, values, and methodology for building and managing your company. Strategies also establish guidelines for evaluating important business decisions. In most industries there are four to six core strategies that successful businesses follow. These core strategies are easy to understand, remain relatively constant over time, are used by market leaders and result in profitable growth. Here are two examples of a core strategy: “Price isn’t everything,” and “Attract the very best employees and give them a stake in the business.” What are your strategies

5. The Plans – What is the work to be donePlans are the specific actions the business must implement to achieve the objectives. Plan or action items should contribute to the growth of your bookkeeping business. Each plan or action item is, in effect, a project. Plans should be action-oriented, list specific tasks and have definitive deadlines or due dates

Once your plan is in writing, it is now time to put that same plan into action. Putting the plan into action is the most important step because the actions deliver the results you wanted when you started this process. For most entrepreneurs, this is easy — you are already action-oriented!

Here is some business advice, as well as a few suggestions, to help you put (and keep) your bookkeeping business plan in action
• Keep the plan with you.
• Use it as a decision-making tool.
• Update it with new thoughts.
• Share it with people you trust and whose opinions you value.
• Measure your progress at least quarterly.
• Prepare a budget to match the plan.

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